LATIHAN 1

Ekonomi Teknik S2 - Martikulasi


1. What lump-sum amount of interest will be
paid on a $10,000 loan that was made on
August 1, 2020, and repaid on November 1,
2023, with ordinary simple interest at 10%
per year?
2. Draw a cash flow diagram for $10,500
being loaned out at an interest rate of 12%
per year over a period of six years. How
much simple interest would be repaid as a
lump-sum amount at the end of the sixth
year?
3. What is the future equivalent of $1,000
invested at 6% simple interest per year for
2½ years?
a. $1,157 b.$1,188 c. $1,184
d. $1,175 e. $1,150
4. How much interest is payable each year on
a loan of $2,000 if the interest rate is 10%
per year when half of the loan principal
will be repaid as a lump sum at the end of
four years and the other half will be repaid
in one lump sum amount at the end of
eight years? How much interest will be
paid over the eight-year period?
5. In problem 4, if the interest had not
been paid each year but had been
added to the outstanding principal plus
accumulated interest, how much
interest would be due to the lender as a
lump sum at the end of eighth year?
How much extra interest is being paid
here (as compared to problem 4) and
what is the reason for the difference?
6. What amount would need to be paid
each January 1 into a savings account
if at the end of 15 years (15 payments)
you desired $10,000? Annual interest is
7%.(Note: that the last payment will
coincide with the time of the $10,000
balance)
7. A future amount, F, is equivalent to
$1,500 now when six years separate the
amounts and the annual interest rate is
12%. What is the value of F?
8. A present obligation of $20,000 is to be
repaid in equal uniform annual
amounts, each of which includes
repayment of the debt (principal) and
interest on the debt, over a period of
five years. If the interest rate is 10%
per year what is the amount of the
annual repayment?

9. Suppose that the $20,000 in problem 8 is to be repaid
at a rate of $4,000 per year plus the interest that is
owed based on the beginning-of-year unpaid
principal. Compute the total amount of interest
repaid in this situation and compare it with that of
problem 8. Why are the two amounts different?
10. A person whises to accumulate $2,500 over a period
of 15 years so that a cash payment can be made for a
new roof on a summer cottage. To have this amount
when it is needed, annual payments will be made
into a savings account that earns 8% interest per
year. How much must each annual payment be? Draw
a cash flow diagram.
11. It is estimated that a copper mine will produce 10,000
tons of ore during the coming year. Production is
expected to increase by 5% per year thereafter in
each of the following six years. Profit per ton will be
$14 for years one trough seven.
a. Draw a cash flow diagram for this copper mine
operation from the company’s view point
b. If the company can earn 10% per year on its
capital, what is the future equivalent of the copper
mine’s cash flows at the end of year seven?
12. You have just learned that ABC
Corporation has an investment
opportunity that costs $35,000 and
eight years later pays a lump sum
amount of $100,000. What interest rate
per year would be earned on this
investment? Calculate your answer to
the nearest one-tenth of 1%. The cash
flow diagram follows.
$100,000
Corporation's
view point
0
8
Years
$35,000
13. If $25,000 is deposited now into a
savings account that earns 8% per
year, what uniform annual amount
could be withdrawn at the end of each
year for ten years so that nothing
would be left in the account after the
tenth withdrawal?
 17. Consider the cash flow diagram and
answer.
P

14 It is estimated that a certain piece of equipment

can save $6,000 per year in labor and material
costs. The equipment has an expected life of five
years and no salvage value. If the company must 1 2 3 4 5 N-1 N
earn a 15% annual return on such investments, EOY
how much could be justified now for the interest = i%/year
purchase of this piece of equipment? Draw a cash
flow diagram from the company’s viewpoint.
a. If P = $1,000, A = $200, and I
%= 12% per year, then N =?
15. A proposed product modification to avoid
production difficulties will require an immediate b. If P = $1,000, A = $200, and
expenditure of $14,000 to modify certain dies. N = 10 years , then I%=?
What annual savings must be realized to recover c. If A = $200, I%= 12% per
this expenditure in five years with interest at 10% year, and N = 5 years, then P =?
per year? d. If P = $1,000, I%= 12% per
year, and N = 5 years, then A =?
16. You can buy a machine for $100,000 that will
produce a net income, after operating expenses,
of $10,000 per year. If you plan to keep machine
for four years, what must the market (resale)
value be at the end of four years to justify the
investment? You must make a 12% annual return
on your investment.
 19. Suppose that $10,000 is borrowed now
at 15% interest per year. A partial
repayment of $3,000 is made four years
from now. The amount that will remain
18. Using the figure below, find the equivalent values of
to be paid then is most nearly :
cash flows I, II, III, IV, and V to a single $ 1,000, cash
flow at the end of 2015 when the interest rate 5 % a. $7,000 b. $8,050 c. $8,500
per year ? d. $13,000 d. $14,490

III 20. Equal end-of-year payments of $263.80

each are being made on a $1,000 loan at
II 10% effective interest per year.
a. How many payments are
IV V
required to repay the entire loan?
I b. Immediately after the third
payment, what lump-sum amount
$1,000 would completely pay of the loan?
I=5%

EOY
21. John Q wants his estate to be worth
2010 2015 2019 2023
$200,000 at the end of 10 years. His net
worth is now zero. He can accumulate
the desired $200,000 by depositing
$14,480 at the end of each year for next
10 years. At what interest rate per year
must his deposits be invested?